tv U.S. Senate CSPAN December 9, 2009 9:00am-12:00pm EST
of the widening academic scandal known as climategate and the absence of a national consensus on climate change legislation, and because of the uncertain prospects for cap and trade legislation in the senate, the administration concluded they had to do something. to bolster on the world change the president had to enforce something that he negotiated at copenhagen. airmass edge to the president is it is inappropriate for him to engage in international negotiations in the midst of this recession, in the midst of this academic schedule and the absence of national consensus on this issue and that is the connection. ..
ocean. that may answer your question a limit on on why it is a political statement as it was released. thank you. >> the demand for hunger assistance has risen by 26 percent over the last year. according to a new report by the u.s. conference of mayors. the largest average increases 1991. this is 30 minutes. >> good morning everybody. i'm tom cochran, ceo and executive director of uscm conference of mayors. the conference of mayors led by the mayor of new orleans, led a call for to question whether or not the federal government was responding to the demand that we had throughout our country for emergency service, food and hunger and homelessness.
and so it was that a call for the united states conference of mayors to create a task force to be the watchdog as well as the group of people that would work with the federal government to reach these goals. that was many presidents ago. some have been with us and some have not been with us. and so there's been some turbulence and confusion between the mayors and the federal government on this issue. we are very pleased that today, we have a government working with us. we had the obama administration with us today, with people that have come here and are working night and day. we have a stimulus program that is out there. we have unemployment that is like a monster, raging in our cities. but we know that it would have
been a hell of a lot worse if we had not had the stimulus money. so we will talk about that as we go forward. so we've got good news and we've got bad news. but it could always be worse, and it could always be better. so that's what this organization is all about. and that's what the people behind me are all about. 24/7 working on these issues. this year's report will include a new and expanded stimulus government program, that i mentioned. it's a different kind of twist on this than we have had before. the survey findings will be presented by gastonia mayor jennifer stultz, the cochair of the hunger and homelessness task force. sacramento mayor kevin johnson. this dolt will give the major findings of hunger. mayor johnson will give an overview of what was found regarding homelessness in the survey findings. in addition mayor johnson without the survey cities are using stimulus funds to address
hunger and homelessness. secretary shaun donovan, we are so pleased to have with us today, would then respond to the survey findings and discuss his department's approach to the issue of homelessness. this is not the first time that secretary donovan has been with us since he became -- he came even before he was secretary, alleging that he was the housing director of new york city. so he's been with us all the way, and we are so pleased. i also want to mention that he is the chair of the uscm agency council on homelessness. and agriculture department is very, very important. we are so pleased to have doctor thorton, and she would respond to hunger find that this department, although perceived to be much more rural, when it comes to feeding people that
live in apothecaries of america, this department is doing more and more to serve urban and suburban america. so i this point i would like to call in order, i would like to call the chair, ms. stultz, of gastonia. and then after her we will go with each person i have mentioned. thank you very much. >> thank you, tom. i appreciate having the opportunity to be here today. and i think about all the cities that have been surveyed, my city is probably the smallest of 73000 people. but yet we still deal with the same issues of hunger and homelessness in our area, which is the charlotte metropolitan region that we received 25 studies from the cities. the cities were asked in a number of request for emergency food assistance that has increased or decreased, or stayed the same. 23 out of 24 other cities
reported an increase in requests for food. which is an over 20% increase nationwide throughout our study. the average report increase was a total of 26%, which is higher than that of 1991. when asked to cite the top three causes, the most common responses were of course unemployment, which were cited by 92 percent of the respondents. high housing costs, was 60 percent of the respondents. and of course, low wages was 48%. of course, medical costs were the next one rated in that. cities also reported a large% of total pounds of food distributed, although that many of the food distributors and groups that distribute food have had less to be able to distribute because of cost cuts. our grocery store chains have been really one of the most
benevolent and actually delivering food. but as that has cut back, because of the economy, it is even more of a critical issue for our cities to receive and distribute food. cities also reported an increase in the number of people requesting food assistance, and i guess this is one statistic that has concerned me as a mayor more than anything else. because it specifically because of the recession, because of the number of job losses, because the families are losing their savings accounts and all their other resources, those families who had once been donors are now recipients. so we're looking at the middle class families have once participated and donated food for hunger relief in their communities, are now in a situation were they in turn are having to ask for assistance here and that in itself is a statement issue for many families that feel like now they are embarrassed by the fact that
they indeed have to go out and ask for food assistance. 76 percent of the cities surveyed reported that food panties and emergency kitchens have had to make their cutbacks this year. so if all back on us as mayors consistently to make sure that our underserved are served. and we are the bottom of the food chain ourselves. so we hear the calls. we hear the calls of crisis. i think one new unique entity that has happened through this whole hunger initiative is a gleaming initiative, where there are places where food is not food or leftover, now being transferred on to other food shelters or other gay shelters to be able to feed people. in my local community, a group of high school students are working with the schools in order to take the food that was not serve in their schools and
deliver that to day shelters so that people can be fed. and that whole realm is a totally different scenario with no people that have been served, have been donating now being served and now we're looking at the cleaning process. if we look at the painting of the cleaners that was painted back in the 1800s, a lot of people were dismayed by that. knowing that people had to come along and pick up the remaining pieces of the grain in the field. but that's what we're looking at in our cities to be created to be able to meet the needs of our folks. one thing that i'm particularly proud of in north carolina, is that we are a best practices in the state in the area of housing for homeless. and that every tax credit project that is built, 10 percent of the project has to be for disabled people are potentially homeless people. so what happened to look at being more creative and how to
serve our hungry and are homeless in our communities. as mayors, we get a telephone calls from those families that say i've paid my bills, i paid my rent, those things are not negotiable when it comes to feeding my family. that's where we struggle the most. so we have to look at these statistics and know how we can be creative here fortunately, we've been able to receive federal funds that have helped. 92 families with relief and actually paying the fees for moving into a facility, because that is such a great cause to even move into an apartment or into a home. we have been able to do that. into the new funding that is available through the stimulus funds would have been able to keep 25 to 30 fairest of becoming homeless because we want to prevent homelessness, rather than have to intervene. so i appreciate the opportunity of having shared this issue on hunger. thank you.
>> thank you, mayor. eye, too, mayor of sacramentally am really excited to be here. this study here i am hoping that everyone gets a copy of hunger and homelessness in this country. we look at the great american cities, 27 of them, and there were a lot of things that we all had in common. so let me share a few of those and then i will be a little more specific on sacramento. 19 cities, 76 percent of the respondents reported, an increase in family homeless over the past year. primarily a result of recession of undeployed. so you can see this trend over and over again how the economy is impacting all of us. cities reported the top cause of family homelessness for lack of affordable housing, 74%. poverty, which you can imagine, 52%. and unemployment, 44%. 16 of 23 cities reported that
homelessness among individuals had decreased or stayed the same over the past year. the decrease in level was often attributed to the long-term policy that many cities were doing in terms of prominent supportive housing for the chronically homeless, especially as it relates to single adults. this is something that has been going on for four years, fighters in a lot of cities around the country. that has been very, very impactful for all of us. 22 cities on the tassos, 82% responded reporting having to make adjustments to accommodate an increase in the demand of shelter. so while in some respect it may look even, there were waiting list that there's one particular shelter in sacramento where 300 people are on a waiting list in terms of shelters. so there's been a significant challenge for all of us around the country in terms of this particular problem here. let me talk about sacramento here, and i will dovetail in a second. sacramento has been especially
-- been hit especially hard in terms of the foreclosure rate. we're talking 5.2 percent in sacramento. our unemployment rate is 13%. that's very significant. california has been hit harder or as hard as any state around the country. and you folks know this. as california goes, or as california goes, the rest of the country is impacted accordingly to our county, and sacrament, we have a joint jurisdiction between county and city. the county of sacramento cut 84 percent of their funding for homeless programs this year. so not on every looking at significant challenge short and long-term, you add the egg on the. you add to the county is cutting back. we had this issue with emergency shelter in winter show to having no resources to be able to do with that particular challenge, and we found a way to do and i will talk about that in a second. the 10 year plan has worked to end chronic homelessness in our committee and a very significant way. for individuals and sacrament, we had a decrease of 31%.
on the flipside, there was a 14% increase, and some of his mirrors the national trend. some of it exceeded its a 14% increase for families to the national trend, 76 percent of the seas around the country report an increase in family homelessness. my campaign slogan in sacramento when i ran for mayor was a city that works for everyone. and that was what the homeless population in mind that i felt local government had a responsibility to take care of the least among us, and that was our homeless population. so we came up with a really bold initiative. and our initiative is, we wanted 2400 prominent housing units over the next three years. and that would not have been possible without the stimulus of dollars. 2400 permanent housing units over the next three years. some of you may have seen this. we had a fortune late a story covering 10 cities in sacramento. and for the first time, we wanted to be a city that did not sweep it under a rug. we wanted to be a city that hit
it head-on. it was kind of a dirty little secret on sacramento that no one wanted to talk about, but we felt like we had to do with the brutal facts of sacramento. there are other cities in the state also have 10 cities. and we are very committed to making sure that we talk about the homeless population in sacramento, that the stigma that we once associated with a homelessness is much broader. it is no longer a certain profile. its expanded. you're now talking about families, you are now talking about women and children. you are not talking about stable families who were renters who the landlords have lost homes and are now on the street exit of a much broader tent of those who are homeless around this country. so our initiative is called sacramental steps for. and that initiativinitiative of sacramento since four is broadening the 10 year plan to end chronic homelessness that it takes that peace and broadens it again because we have a much broader population. the stimulus support that we're getting has been very
significant in sacramento. we are able to get dollars for the neighborhood stimulus nation funds. $6 million, dollars for hp rp. what i'm very thankful to the obama administration secretary donovan. they are transforming and redefined the way you look at homelessness. yes, the caning of care is all going to be important to permanent housing is where we are all going as a country. we would not be able to get there if it had not been for the obama administers and secretary donovan. so we are very excited to talk about prevention and rapidly housing and everything we do. i want to close with two simple things. the first is the homeless people in sacramento, they want to be empowered. they do not want a hand up if they want a hand up. and we have found that in every other city in the survey. people want to be respected. they don't want to be stigmatized or they don't want repayment. everyone did not choose to be hosted it is always on the ability to fight on behalf of the least among us.
so nice they don't want to be empowered, they want jobs. and if they don't have the skill, they want job trying to get the skill. to be reintegrated back into society. they want to be taxpayers that they want to contribute. asked taxpaying citizens in the community. i think that's very significant. in terms of all of us that we are talking about, our homeless population. they said to me, they don't mind the spirit of tough love. they don't want somebody just to do things to them. they want to be a part of the solution and engage in a conversation. so certainly, tough love is something we will do all over this country. and in the last thing i want to say for all of us, speaking on behalf of the 27 mayors that were part of this study, the u.s. conference of mayors, and so faithful to executive director cochran for his did. but we have to share best practices. we have to share what's working in our city or what's not working in our city with other cities around the country. and that's kind of a commitment. when it says the sacramento steps for, that means everyone has to be a part of the solution, whether it is the
business committee, faith based committee, nonprofit and providers. everyone has to be part of the solution and that's what we mean by sacramento steps for. we were able to provide more winter shelters this year they were able to last year with even less. because we had a five way split. we had federal dollars coming in. we had county dollars. we had city doctor quinn philanthropic community and we had provided all chip in wetherbee in kind or what appeared to have a tremendous job in a country. but i think the opportunity is one that we are already four and our commitment is to make sure that sacrament is a city that works for everyone. thank you. >> thank you, mayor johnson. i am so pleased to be here today to the opportunity to join mayor stultz and johnson. i want to say thank you to tom cochran has been a tremendous leader on this issue, and so many others. and particular to my colleague,
deputy undersecretary thorton. and very, very happy to get a better perspective on the findings of the conference of mayors on the hunger and homelessness survey. i want to say thank you to the more than two dozen cities who are on the frontline, as you just heard, from mayor johnson, from mayor stultz, tackling the difficult issues of homelessness that took part in this survey, took the time to help us learn from the work that they are doing on the ground and from their leadership. while these are difficult times for everyone, it is clear no one is feeding the force of this economic crisis more powerfully than those who are homeless or facing the prospect of homelessness. indeed, one of the most tragic consequences of our housing and economic crisis is those who have fallen into homelessness as a result, whether through foreclosures, evictions, laos, or other financial problems. and this study revealed as did hud's own report was released in july, that the number of
homeless families is on the rise. would increase in rural and suburban homeless as we found an increase of 56 percent in rural and suburban family homelessness. we see that homelessness is not simply an urban problem, but one in every community increasingly a struggling with in these economic times. as diverse as our homeless population is, there is one thing that ever who is homeless shares. and lack of housing that they can afford. and as this study finds high housing costs often lead them is to cut back on other necessities, like food. that's why today i want to reiterate very clearly what i've said before. that the federal government is backing the business of affordable rental housing. you need only look at the $14 billion hide is investing in our committees through the recovery act to see that we are from our 2 billion-dollar investment in full funding a project section eight elements, to our two and a quarter billion dollar injection of funding to
stabilize affordable housing development that have been financed by the low income tax credit. the single most important source of funding for new developer today. our fiscal year 2000 budget builds on these assessments. increasing funding for the housing choice voucher program in capitalizing for the first time ever the national housing trust fund. when i was a new york city housing commission, we have lived the largest local affordable housing plan in american history. to create or preserve 165,000 affordable homes for half a million people. more than the entire city of atlanta, georgia. that's the kind of scale we need nationally, and realizing it starts with the national housing trust fund. during the early 1980s, a part of our response to the rapid growth of homelessness was to emergency shelters. today, our challenge is to do everything in our power to make sure families spend as little time as possible in those shelters. and we have a lot of new tool to help us do that.
from the recently passed which consolidated hud's homeless funding screens and increased deficits on prevention to the $1.5 million we dedicated in the president's recovery act, to the homeless prevention and rapid rehoused program. or hprp that you just heard mayor johnson talk about. i am thrilled that the conference of mayors report is rvd getting early successes that hprp is heading across the country. with agencies reported that hprp is fundamentally changing the way their communities provide services to people who are homeless, or at risk of becoming homeless. in communities like alameda county, now 40, hprp has helped create the priorty home a partnership with eight housing resource center providing chordata preventioprevention and we housing assistance, and essential to 114 by. and as the chair of the council on homelessness, we are committed to making these approaches, taking his approach is to scale across the federal
government. developing and implement a federal strategy to prevent and end homelessness that strengthens existing partnership such as hud voucher program to help homeless veterans that forges new partnership between agencies like hud that are in administration and hhs. and i'm very excited that we have our new executive director of the interagency council, barbara poppy, here today and onboard to help lead the way towards our plan for ending homelessness at the federal level. of course, in the last decade we have made great progress in developing new approaches to tackle chronic homelessness. by improving the technology combined housing and supportive services, we have moved the needle on chronicle was that reducing the number of chronically ill long-term homeless by nearly one third. and despite economic crisis, the data being presented here today demonstrate that the number of chronically homeless individuals has remained stable, and even declined in many areas.
the fact is we have now proven that we can has anyone. our job now is to house everyone. to prevent and end homelessness. all homelessness. each of these tools is about the same thing, building on the remarkable innovations that have been demonstrate at the local level, and in cities nationwide, to provide everyone from the most capable to the most foldable opportunity to reach their full potential. working with the conference of mayors my college from across the administration and all of our partners on the ground, we can make that vision a reality. and we will. thank you for inviting me here today. >> good morning. i certainly appreciate the opportunity to be here to talk with you today about the critical problems of homelessness and hunger. usda recently released its 2008 report on food security in the
united states, and the news was not positive. not surprising, i don't think, to many. 14.6 percent of u.s. households face food insecurity issue in 2008, up from 11.1 percent in 2007. this is the highest increase observed since probably the program was initiated, or we took record back in 1995. about 67 million households, or five points ever-present the population, had very low food insecurity, up from 4.7 million households, or 4.1%, and 2007. and well chosen are usually shielded from the worst impacts of the very low food security, and over 500,000 families with children in 2008, one or more children simply did not get
enough to eat. they had to cut the size of their meals, skip meals, or even go whole days with no food at some time during the year. and given the economic climate over the past year, there are likely to be more people experiencing food insecurity today. the fundamental cause of domestic food insecurity and hunger is housel poverty. the lack of adequate resources to address the basic needs, such as food, shelter, and health care. the administration has pursued an aggressive program of actions to address poverty through a broad expansion of economic opportunity. the american recovery and reinvestment act, is projected to create or save about 3.5 million jobs while making
long-term investments in health care, education, energy, and infrastructure, providing tax relief for working families and working to promote affordable housing and improve neighborhoods and communities. arra has strengthened the program with a substantial increase in our supplemental nutrition assistance program benefits, more commonly known as snape. and are other funny. the infrastructure investments and all of our major programs have also been increased. most snap households before received an additional $80 a month in the monthly benefit. this has been a great help to those folks at the grassroots level. in times of economic change, federal nutrition assistance programs, the nation's first line of defense against hunger, or vice benefits that flow to
communities, states, or regions that face unemployment or poverty. in recent months these programs have responded vigorously to the economic downturn. the latest figures show that nearly 36.5 million low income americans, a record high, participate in our supplemental nutrition assistance program. about half of these are children's. total participation in snap grew 24 percent between august of 2008 and august 2009. we are working with states to help them cope with increasing participation, and workload management strategy, administrative simplification and demonstration projects. we are having a real issue in some states because of the dramatic increase in numbers of folks that are out there
applying, and actually being able to get through all the paperwork at the state level. >> we leave this report for dana mccann of the senate health care debate. senators will begin the day with a general debate on the bill and assorted amendments. no votes are scheduled yet today. yesterday a group of liberal and moderate democrats agreed on a new plan to replace the government run and shoot program and the bill called the public option. the proposal is now in the hand of the congressional budget office which is taking the cost of the new plan. if it is too high senators will have to renegotiate. details of the public option replacement have not been released. and now live to the senate floor here on c-span2. the chaplain: let us pray. god of justice, bring wholeness to our world.
keep fear, ignorance, and pride from limiting your work in our nation. give the members of this body the insight to understand the actions they should take during these challenging times. quicken their hearts and purify their minds. broaden their concerns and strengthen their commitments. lead them through this season of challenge to a deeper experience with you, enabling them to feel you in their midst as they grapple with the problems of our time.
we pray in your holy name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c, december 9, 2009. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable paul g. kirk jr., a senator from the
commonwealth of massachusetts, to perform the duties of the chair. signed: robert c. byrd, president pro tempore. reid mr. president? the presiding officer: the chair recognizes the majority leader. mr. reid: following leader remark, the senate will resume consideration of the health care reform legislation. following the remarks by the chair and ranking member of the finance committee or their designees, the next two hours will be equally divided and controlled between the two leaders or their designees with senators permitted to speak for up to ten minutes each. the republicans will control the first 30 minutes. the majority will control the second 30 minutes. the remaining time will be equally divided and used in an alternating fashion. no amendments are in order during the controlled time. roll call votes could occur this afternoon but at this stage we have no knowledge that we have worked anything out and don't know if we will be able to work anything out. we'll give members as much notice as possible. mr. president, much of this
momentous health care debate revolves around numbers, as it should. we read them in reports, see them in charts, hear about them in speeches. the state of health care in this country is in such severe crisis that these numbers are often quite overwhelming. today i want to talk about one number: 31. 31 has a special significance, especially today along the course of this long, historic pursuit, to make it possible for every american to have health insurance and good health. first, let's discuss the future. the number 31 is a powerful reminder of both the great opportunity before us and the great cost of inaction. tangible illustration of what we stand to gain and what we stand to lose. when we pass this bill, 31 million americans who dade have no health insurance will have health insurance. at long last. that means they no longer will have to put off the surgery they
need or be able to finally use their prescriptions as prescribed, not a half a pill every day, a whole pill every day. it means that 31 million americans will have a decent shot at a healthy life. but if we don't act, if we less misinformation confuse us or less distractions divert us or refuse to answer the american people's call to action, many more will suffer. in nevada, like every other state, health insurance costs continue to climb. if we don't act, in just six years the typical nevada family will spend more than 31% of its income on health care premiums. almost a third of every nevadan's paycheck will go right to his or her health care coverage. that number is even higher on average throughout the country, but only if we do nothing. second, let's talk for just a little bit, mr. president, about
today, the present. right now every 31 minutes insurance companies terminate the insurance for 300 americans. every 31 minutes. sometimes it's because you've lost your job, because you lose your health care to go along with it. sometimes it's because you changed your job, because your health care company hasn't come along with your job change and sometimes the very time you need it the most, the insurance company says, so, we're not going to continue the insurance-- --says, sorry, we're not going to continue the insurance that we've given you before. because they wnts to mak want te money. you have to recourse. maybe you've had high cholesterol your whole life, or maybe acne as a child or had a c-section as an adult.
health insurance companies have used all these reasons to drop someone's coverage. maybe you had minor surgery 10 years ago or your mother had breast cancer or your father had heart disease. that's all it takes. we all know that, much like our republican colleagues, insurance companies will use any excuse in the book to say "no." but that statistic, every 31 minutes in america more than 300 people lose their health insurance coverage, what does it really mean? imagine if the senate gallery, 600 people can be seated in our galleries, imagine if every single one of these seats was filled by a good american citizen who wanted to come and look over the senate. and they all had health care when they came in here. imagine that each of them came northern to watch their government at work, observe the proceedings here on the floor for an hour or so. then each of them went on their
way. on their way out the door they were told that no longer would they have health care. that's what's happening right now in america. the wealthiest and greatest country in the world, every 31 minutes, 300 more people lose their health coverage. third and finally, let's talk about the past. let's put the historical moment upon us in the context of history. it was 31 years ago today, this day, that senator ted kennedy gave one of the most profound and stirring speeches over his remarkable life and over the history of our senate and certainly in the history of our nation's long health care debate. in that talk, he said -- well, in fact he made an observation that rings just us a true today as it did more than three decades ago. he said, an yo and i quote, mr. president, "one of the most shameful things about modern america is that our unbelievable rich land and the quality of
health care available to our people is unbelievably for a and the cost is unbelievably high." close quote. senator kennedy observed how out-of-control observ costs werk in 1978 and warned how quickly they would rise if we didn't act. well, we didn't act. in the past 31 years, health care costs have skyrocketed and that's a gross understatement. the number of uninsured americans has done the same. more bankruptcies than ever. three out of five are because of medical expenses. other countries, mr. president, have no bankruptcies because of medical expenses -- germany, france, great britain, japan. they don't have bankruptcies because of health expenses. the cost of prescription drugs has doubled in just the past decade and far fewer small businesses can afoferred to cover their workers. and -- can afford to cover their
workers. and one more thing has happened. the resistance of the health insurance industry and congressional republicans to change the american people's demand has only become more tone-deaf and more intense. if we don't act this time, those terrible trends will only continue. i can hear senator kennedy now. i wasn't hear 31 years ago, but i can hear him, as i listened to him very closely for more than 31 years. costs will continue to go up without end, more americans who have health insurance today will lose it, more patients will die of disease. we know how true it is. and insurance executives will laugh all the way to the bank. one company made $1 billion last year, the chief executive took
home $100 million. how's that? much of the health care debate revolves around numbers, but at its heart it's really about people. 31 years ago, senator ted kennedy being ad us to recognize that health care is -- quote -- "a basic right for all, not just an expensive luxury for the few." a generation later, good health is still a luxury in this country. while working day and night -- we're working day and night to see if we can help the generation that's here now and generations to come. if we don't, they will have the same memories 31 years from now as senator kennedy prophesied 31 years ago.
mr. mcconnell: mr. president? the presiding officer: the republican is recognized. mr. mcconnell: mr. president, the american people have now seen what democrats in congress plan to do with seniors' health care. they've looked on in total disbelief as the majority voted again and again and again to slash medicare by nearly half a trillion dollars. inhincredibly, these cuts repret just part of the pain caused by this bill. in addition to punishing seniors, it would punish businesses. at a time when one out of ten working americans is looking for a job, this bill would hit employers are job-killing new taxes and mandates. and it wouldn't do anything to lower long-term health care costs. this is the latest thing business owners expect -- this is the very last thing business
owners expected from this bill. it's the last thing america needs in the midst of a recession. and it's just one of the reasons more and more business groups are stepping forward and speaking out against this job-killing bill. yesterday i mentioned a letter signed by ten major trade groups pleading with us not to improve this bill because of the effect it would have on business. later in the day, the national federation of independent business, one of the leaders in the small business community, release add letter explaining why they oppose the bill. they said, "any health care reform faces two tests, two tests for small businesses: does it lower insurance costs? does it lower insurance costs? and will it increase the overall cost of doing business?" according to them, the senate bill fails both of these tests and, therefore, fails small business.
they've seen the c.b.o. conclude this bill would lead to higher premiums, they've seen the billions of high taxes that would fall on small businesses and they've seen the mandates and fines that would kill jobs. and they've concluded that this bill would actually be worse -- this bill would actually be worse for small business than the current situation. it is abundantly clear that the more americans learn about this bill, the more they oppose it. and now we know the same goes for business. businesses that can't ensure workers -- insure workers face stip fines resultinsteep fines t wages. this so-called employer mandate would have a disproportionate impact on low-income, entry-level workers. at a time of 10% unemployment, we should be doing everything we can to create jobs.
this bill would only lead to more lost jobs. medicare cuts are bad enough, but this bill doesn't just hurt seniors. it hurts the economy as well. that's why americans overwhelmingly oppose it. speakf how people feel about this bill, mr. president, we see signs of opposition everywhere. public opinion is overwhelming. we see unanimous, in all the polls across the country the american people are saying don't pass this bill. last month's tkaoub in a toerl elections in new jersey and virginia -- gubernatorial elections in new jersey and virginia were a stinging review to the opposition to more debt, higher taxes and endless bureaucracy. mr. president, there's a new development. just yesterday -- just yesterday in my home state there was a special election for the state senate. why would that be worthy of commentary on the senate floor? let me describe the situation, mr. president. it was a 3-1 democratic
district. because of state issues, the democratic state administration was intensely interested in winning that seat. they spent $1 million cumulatively, the candidate, the democratic state party, and outside interest group in support of the democrat, $1 million on just one side of a state senate race in a rural area of my state. on the other side was a republican candidate, outspent 5-1, outspent 5-1 in a 3-1 democratic district. the republican candidate for the state senate won by 12 points. how did that happen? mr. president, he had one message. one message: oppose the rebuild, oppose what pelosi is doing, oppose what the democrats
in washington are doing. in other words, the candidate who was outspent 5-1 in a district where he was outregistered 3-1 made the sole issue in the senate race what is happening here in washington on this bill that's on this floor. that ought to tell you, mr. president, on the heels of the virginia and new jersey elections what's happening in this country. people have seen enough and heard enough, and they want it to stop. the message is simple: this health care bill is a losing formula all around. that's the message americans are sending loud and clear. the signs are everywhere. we saw it yesterday in my home state. it's time to stop this bill and start over. i yield the floor. the presiding officer: under the previous order, the leadership time is reserved.
under the previous order, the senate will resume consideration of h.r. 3590, which the clerk will report. the clerk: calendar number 175, h.r. 3590, an act to amend the internal revenue code of 1986 to modify the first-time home buyers credit in the case of members of the armed forces and certain other federal employees, and for other purposes. the presiding officer: under the previous order, following any remarks of the chairman or ranking member of the finance committee or their designees for up to ten minutes each, the next two hours will be for debate only with the time equally divided and controlled between the two leaders or their designees, with senators permitted to speak for up to ten minutes each, with the republicans controlling the first 30 minutes and the majority controlling the second 30 minutes and with the remaining time equally divided and used in an alternating fashion. mr. baucus: mr. president?
the presiding officer: the senator from montana. mr. baucus: mr. president, for the benefit of all senators, let me lay out today's program. there's been nearly three weeks since the majority leader moved to proceed to the health care reform bill, and this is the tenth day of debate on the bill. the senate has considered 18 amendments or motions. we have conducted 14 roll call votes. today the senate will debate the amendment by the senator from north dakota, senator dorgan, on the prescription drug re-importation. at the same time we'll debate the motion by the senator from idaho, senator crapo, on taxes. under the previous order, the time until 12:30 p.m. today will be for debate only with the time equally divided and controlled between the two leaders or their designees. following remarks of the ranking member of the finance or his designee, the majority will control the first hour, the republicans will control the second hour. we are hopeful that the senate will be able to conduct votes on or in relation to a
second-degree amendment to the dorgan amendment. the dorgan amendment itself, side by side to the crapo motion and the crapo motion itself. there after we expect to turn to another democratic first-degree amendment and another republican first-degree amendment. we're working on lining those up. over the course of this debate, there's been too much misinformation about what health care reform is and what it will do. i'd like to set the record straight. the goal of health care reform is to lower costs and provide quality affordable coverage to american families, businesses and workers. and according to the nonpartisan congressional budget office, our bill, the patient protection and affordable care act, is a success. according to the c.b.o., this bill provides health insurance coverage to 31 million more americans. that's a big success. it lowers health insurance
premiums despite what some have said, some claimed about premiums rising, that's not true. the c.b.o. says this legislation lowers health insurance premiums but for 7%. that 7% gets much higher-quality health care insurance than it otherwise would get. the c.b.o. also says this legislation reduces the federal deficit by $130 billion over the first ten years. reduces the federal deficit by $130 billion over the first ten years. in addition, as the president promised this, bill does not raise taxes on the middle class. in fact, this bill has a net tax cut. over the next ten years this bill will provide a total $338 billion in tax credits to help american families, small businesses and workers buy quality affordable health care coverage that they can count on. that's a tax cut, mr. president.
a total of $338 billion in tax cuts. the chart behind me will begin to indicate that. over the next ten years this bill will provide a total, as i said, $338 billion in tax cuts. the bill provides a net tax cut of $40 billion in the year 2017. you can see that basically in the chart. $40 billion of tax cuts in 2017. that's $450 for every taxpayer afbgtd. these are -- affected. these are individual tax cuts. let me make that khraoefrplt american individuals will get tax cuts in this legislation in these amounts. in 2017 low- and middle-income taxpayers will see an average federal decrease of nearly 37% that's c.b.o. don't take my word for it. that o'c.b.o. and the joint
committee on taxation. the average taxpayer making less will receive a tax credit of more than $1,300. that tax credit grows in 2019. those are tax cuts, mr. president. it is very important we remember this bill is a net tax cut of this amount for american taxpayers. that's individual taxes, tax cuts. i have heard arguments that the responsibility to have health insurance amounts to a tax on the middle class. this is simply not true. in fact, this policy works to repeal the hidden tax of more than $1,000 in extra insurance premiums to american families for health insurance pay each other in order to cover the cost of those without health insurance. that is $1,000 per american family on average has to pay into the current system. this bill would virtually eliminate that. additionally this bill provides
americans with the tools they need to meet that responsibility by ensuring all americans have access to quality affordable health insurance. the bill eliminates barriers that prevent americans from getting insurance coverage, such as discrimination based on preexisting condition. this bill eliminates that. we all, either directly or through a family member or a friend, have heard horror stories on insurance companies denying coverage because of a preexisting condition. this legislation stops that. and it makes this legislation makes quality insurance affordable to every american through tax cuts and helps with co-pays and other out-of-pocket costs. if for some reason an individual still cannot afford to buy health insurance coverage that's unavailable to them, they're exempt from paying the penalty. clearly this penalty is not a tax. if you can't afford it, you don't have to pay. no penalty. also heard arguments that the excise tax on private insurance
companies offering costly and excessive insurance plans will raise taxes on individuals. this claim is equally untrue. the congressional budget office reaches the conclusion that that's not true. in fact, the spwoefpl c.b.o. reaches the -- the congressional budget office reaches the conclusion it will lower premiums. i think the amount is 12%, the amount stated in the letter to the congress. this policy, therefore, is not a tax on individuals. rather, it's a tax on private insurance companies and not pass on in the nature of higher premiums. this legislation is designed to encourage private insurance companies to offer and employers to choose health insurance plans with lower premiums below the taxable threshold and the congressional budget office noted just how effective this policy is in its report when it said most people would avoid the cost of the excise tax by enrolling in plans with lower premiums, as a result c.b.o.
says wages will increase as employers offer more money in workers' pockets. in fact, the bulk of the revenue raised by this provision, more than 83% of it comes not from the tax itself but from increased wages -- increased wages -- as account of this provision. and m.i.t. economist jonathan gruber says this provision will cause worker wages to rise, $700 in additional income for every household with health insurance. the truth is this bill is fully paid for. c.b.o. says so. and it is paid for in a fiscally responsible way. it reduces the federal deficit. it lowers the cost of health care costs, provides quality affordable health insurance to millions more americans. and it is a net tax cut. net tax cut for american families, businesses, and workers which in these tough
economic times means more than ever. a senator: mr. president? the presiding officer: the senator from oklahoma. mr. coburn: thank you. you know, i stand confused from the chairman of the finance committee because we have all the reports of the bill you're talking about and the bill you're going to be voting on because you're totally changing what you're doing. what is out there now is we're going to expand medicare to those down to 55 years of age, and we're going to expand medicaid up to those up to 150%. we're going to add billions of dollars of mandates even at 90% co-pay by the federal government to the states over the next ten years. we have a medicare program that you've taken $465 billion out of and you're going to add 34 million new people to under the new plan that -- the new plan we're talking about. you're talking about the plan
that we used to have. it's interesting, though, as you make those points, when you say it's a net tax cut, three-quarters of the net tax cut goes to people in this country who pay no taxes in the first place. the chairman can't deny that. the fact is according to joint tax committee, the chairman conveniently doesn't look at the other body that gives us information on taxes, according to joint tax committee, $288 billion of the $394 billion will be refundable. that's a refundable tax credit to people who are paying no taxes now. mr. baucus: mr. president, my i ask the senator -- the tax cut, whether or not it is refundable. even if it's refundable, it's extra dollars in people's pockets. mr. coburn: it is extra income
to the average american family. 40 million of them, taxes will rise on those who are making under $200,000 a year. the joint tax committee said that. the point is, is what you're talking about doesn't have any application because we don't have the bill again, because we a new the bill on the floor which is going to take a bankrupt program that our children today are responsible -- if you're born today based on the unfunded liabilities of medicare, you are responsible for $350,000 if you're a new child born today for what we have not paid for in medicare. and now we have the new plan that's going to come out. we've cut $465 billion out of medicare or moved it out of medicare to create a new program, and we're going to add 34 million new americans to it in a plan tha*s that has already
mortgaged the few -- faln -- a plan that has already mortgaged the future of our children. the other thing the chairman said is that cost and health care will go down and premiums will go down. well, there's 11 out of 12 people who have studied the plan that says premiums will rise. what c.b.o. says is that if you're in the individual market, your premiums are going to go up anywhere from 10% to 13%. and, in fact, they're not sure whether premiums will decline. they say it's on the other groups from a 1% increase to a 2% decrease over what they already would have increased. so our problem is cost. that's the thing that stops access to care in this country. the plan -- whether it is the new plan, which nobody has gotten to see the dough tails -- to see the details of, or the
plan that we have gotten to see the details of, the 2,074 pages that we have seen the details of -- raises the cost of health care in this country. but none of that is important because the most important thing is it puts government in control of your health care through the task force on preventive health services, through the medicare advisory commission and through the cost comparative effectiveness panel. so with the wink and the nod is we're going to put government in control of your health care. we're going to put 70 new bureaucracies between you and your doctor. we're going to put 20,000 new federal employees twine and you- between you and your doctor, and we're not going to lower the cost and the average american is not going to get a tax cut. they're going to see a tax increase out of this bill. the average middle-income american is going to see a tax increase out of this bill. and so, consequently, what we
have heard sounds good on the surface, but the most important thing to remember is you are no longer -- you are no longer going to be in control of your health care because, once the government puts its nose under the tent -- just like it did on breast cancer screening, and we have the gall to say we're going to recognize every time the agency does something that's harmful to a patient and their doctor relationship that we're going to come to the senate floor and correct it. and the fact is, is that that isn't going to happen. so ultimately your health care is going to cost more, your premiums are going to rise -- 11 out of the 12 studies say that the premiums are going to rise under the bill that's before us -- and the people that get the tax cuts are the people who aren't paying any taxes now. and to pay for those tax cuts,
taxes are going to rise on 40 million american families who earn under $200,000 a year. mr. president, i'd yield the floor. mr. crapo: mr. president? the presiding officer: the senator from idaho. mr. crapo: mr. president, i'd ask unanimous consent to speak and also engage in a colloquy with several of my colleagues. the presiding officer: without objection. mr. baucus: mr. president, reserving the right to object, what is the -- under the order of the day, what's the allotted allocatallocated time, each sid? the presiding officer: the republicans control the next 30 minutes. then the majority controls the next 30 minutes. mr. baucus: all right. thank you. i thank the chair. mr. crapo: thank you very much, mr. president. i appreciate the opportunity to discuss the issue of taxes and jobs today as we focus on the critical legislation in front of us. i've introduced an amendment --
it's actually a motion -- to commit this bill back to the finance committee to help us to honor the president's pledge on taxes. as we've discussed now for more than a week, notwithstanding all of the claims that are being made about this legislation, one of the irrefutable facts is that it grows the government dramatically. if you take the first full ten years of spending, not counting the first four years that are not included in the spending -- in other words, they are delayed in order to make the numbers look better -- if you count the first full years of implementation of this bill, it will result in $2.5 trillion of new federal spending. it will grow the federal government by that much. and repeatedly president obama has told the american people that he will not allow them to be taxed, those who he describes as the middle class, to be taxed in order to pay for this huge, new increase in federal
spending. to use president obama's own words, "i can make a firm pledge ... no family making less than $250,000 will see their taxes increase ...," "not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your taxes. ... you will not see any of your taxes increase by one single time." and yet what does this bill do? it includes $493 billion of new taxes in just the first ten years. if you use that full ten-year time frame, that time frame that starts after the four years of spending that have been suppressed in order to change the numbers and the calculations on the bill, the total number of taxes in that ten-year window is $1.2 trillion of new taxes. and the question is, do these taxes fall only on the wealthy or do they fall on those squarely in the middle class?
and the answer is, the large majority of them fall on the middle class. in fact, the joint tax committee has indicated that by 2019 individuals earning $50,000 -- between $50,000 and $200,000 would, on average, see a tax increase of $595. families earning between $75,000 and $200,000 would, on average, see a tax increase of $670,000. now, my colleague from montana, the chairman of the finance committee, has argued that there's actually a net tax cut in the bill. how do we get to those numbers? based on a joint committee on taxation report, of the $394 billion in -- that the government will spend on what are called tax credits -- and that's the tax cut that my colleague is talking about -- $288 billion of those $394 billion in credits will go to people who pay no taxes today.
now, if you think about it how see abovencc it be a tax cut if the money is spent from the federal treasury and sent to -- or to somebody on behalf of a person who is not paying taxes in the first place? you can call it -- you can call it a subsidy. you can call it a tax credit, if you want to. i know the words used in the bill are "a refundable tax credit." but the reality, it is nothing but pure federal spending. and in fact the congressional budget office classifies this as government spending. mr. baucus: will the government yield? mr. crapo: i will yield on the senator's time. mr. baucus: that's fine. don't most of the people pay taxes, don't they pay payroll taxes? mr. crapo: there is a pay cruel tax. mr. baucus: there are all kind of taxes that people pay, particularly working people, a lot of taxes they pay. mr. crapo: reclaiming my time,
although people do pay a loss of sales taxes, not federal sales taxes, by the way, and although people do pay a lot of other types of taxes, they'll pay penalties and fees -- in fact, under this bill they're going to be paying a lot more tarvelings the reality is that -- a lot more taxes, the reality is that i don't think that's what president obama was talking b i think his words "you will not see any of your taxes go up," the bottom line here is, you can't say, well, if you offset this tax and you don't count the sales tax or you add in the sales tax and counteract it, that's not what the president was talking b as joint tax says, individuals making between $50,000 ands 200,000 on average would see a tax crees of $590-plus and families between $75,000 and $200,000 would see a net increase on average of $670,000. let's go to the next chart. i note that my colleague from
tennessee is here. if he would like to step in at nir time, please do. ill i have two chick charts to see and then -- i have two quick chartcharts to show and then yon speak. by 2019,ing ther,ing, there wilt 73 million american households earning below the $200,000 that will face a tax increase. sometimes the proponents of this bill says that doesn't net out the subsidies that we're providing to some of them. if you net out the subsidies -- and i don't think that's necessarily a valid argument -- but if you do net out the subsidy, it's still at least 42 million american households that will see their taxes increase under this legislation. now, how see abovencc that comply with the president's promise? and all the motion that i've brought does is say to recommit
this bill to the finance committee and make the bill fit the president's pledge. the president pledged people in the middle class, which he defined as families making less than $250,000 or individuals make being less than $200,000, would not see their taxes go up. and with that, again, i see my colleague from tennessee is ready to join in with me, and i will ask if he has any comments or questions to raise. mr. alexander: i thank the senator from idea hoavment the point that you're make is, if you're going to add -- this bill as proposed is pai paid for, abt half, by medicare cuts, and about half by tax increases. and it's paid for some by sending huge new bills to state governments. but i guess what you're -- the point that you're making basically is that if we're going to add a half trillion dollars in new taxes over ten years or much more than that when the bill is fully implemented, who's going to end up paying those
taxes? it's not going to be insurance company, it's not going to be medical device companies; it's going to be the people who -- it's going to be us; isn't that true? zoo you expect that most of the companies upon which the new taxes are imposed will pass those taxes along to the person people? mr. crapo: yes. as a matter of fact, i in my own mind distinguish between taxes on the american people and fees that will be charged to companies and businesses in the private sector that are also being it i passed on to the amen people. and all of those will occur. one interesting clarification or explanation here is, with regard to this refundable tax credit that is talked about so often, it isn't actually refunded to the taxpayer, as i understand it -- or to the individual who doesn't pay taxes but is receiving the credit. it's paid directly to the insurance company, as i understand it. and so even though some people
could be claimed to be paying less taxes by this argument, because some of those who receive the subsidy will get a great subsidy than they will a tax credit, the fact is even they get a tax increase and even they still pay their taxes at the higher level. it's just that some of them will get a subsidy that will help to offset that. mr. alexander: i wonder, too, if i may take a minute to talk about another form of taxes, which would be state taxes. now, people might be thinking, well, you're talking about a federal health care bill. how -- how do you get state taxes in here? well, let me try to explain that just a little bit. i remember as governor some years ago of tennessee, nothing used to make my madder than washington politicians who'd come up with a big idea, take credit for it, hold a press conference and announce it, call it, for example, "historic," and then send the bill to me, the governor, to pay. you know, and then usually those same politicians would come back to tennessee and they'd mawk a
big speech -- and they'd make a big speech at the jefferson day dinner or the jackson day dinner. in fact, sometimes the republicans were just as bad as the democrats doing t also in 1994 there was a political revolution in the country. this body switched dramatically to the republican side and one of the main ark argtsz argumento more unfunded mandates. don't be coming up with big ideas in washington and send the bill to the governor or the county commission and expect them to raise property taxes or cut services or raise college tuitiontuitions to make it up. so, what i want to say today is this: that this bill already includes a huge, new bill for the state governments. as it's now written, as medicaid for low-income americans is expanded, after a few years
there's a big bill to the states. our governor, who is a democrat, by the way, has been very effective in pointing out this would add about $700 million over five years to our state. there is no way that our state see abovencc pay this bill without a tax increase of significant size or seriously damaging higher education or seeing college tuitions to begin to go through the roof, just like you saw them do in california the other day when they went up 32%. why did they go up? because the state is having to spend so much of its money on health care bills, many of which are required by the federal regulations of medicaid. now, there is a rumor going around that there's a big deal cut last night that would pave the way for passage of this bill is that says instead of a new government-run program, we'll simply expand two of the
government-run programs we already have -- medicare for seniors and medicaid for low-income americans. and i would ask these questions: i mean -- first, with medicare, how in the world see abovencc we take $1 trillion out of medicare when the program is fully implemented, and add -- give 34 million, 35 homosexua million as the chance to join. if it is true that the idea is to expand medicaid to 150% of the poverty level and of course we're not invited to any of the meetings -- they're all written in the back room -- but i its if it's true, our governor says that doubles the cost to our state. so down the road in about four years what we're going to see in tennessee is a new state income
tax or seriously damaging higher education, and i think -- mr. baucus: mr. president, will the senator yield on that point? mr. alexander: yes, on your time. mr. baucus: i'd like to just refute basically the allegation that this is a big obligation on states. that's just totally not true. the question is it not true that on page 7, a letter from the congressional budget office dated november 18 to senator reid that c.b.o. says that the c.b.o. estimates that state spending on medicaid would increase, it says $25 billion over ten years. as a result of in legislation, that's $2.5 billion a year on average for all states. another figure i know is state increase would be not huge, it would be about $1.89% increase -- it would be about a 1.89% of state obligation.
why? expansion of population on medicaid, states are paying virtually all of that. in the first years the centers get a net increase. on that basis it's a 1.89% only increase in state obligation over ten years. does the senator not know that to be true? mr. alexander: mr. president, my understanding of the proposal by the finance committee bill and by the reid bill is that the federal government expands medicaid and pays for 100% of it for a few years, but after that the state has a significant portion of the bill. am i not correct in that, while keeping the floor. mr. baucus: this is a colloquy, so we have to divide this time up. we're only talking about -- mr. alexander: i'm not going to divide the time up, mr. president. mr. baucus: is that a rhetorical question or is that an actual question? mr. alexander: mr. president, i'll retain the floor and i'll make the statement. the senator can make his
statement later then. the fact of the matter is that after three or four years the federal government sends a big bill to the state. the fact of the matter is the governor of tennessee, who is a democrat and who has worked with other governors and is actually leading the national governors association effort to see the impact of this kind of legislation on the state, says it will cost our state $700 billion over five years, $1.4 billion if we go up to 150%. and the state pays that part of the bill, mr. president. that means a big state increase. it means big higher education increases. and i guarantee as a former governor that if this happens that four years from now there will be a revolt in the states, and people will be asking who did this. and in fact, i would say seriously that any senator who votes to expand medicaid and send a significant part of the bill to the states ought to be sentenced to go home and be governor and try to govern the state under those conditions. i think this kind of legislation, and especially the
rumor that i've heard about such a dramatic increase in the expansion of medicaid, will be a damaging blow to american public higher education from which it will never recover. and that tuitions will go to a level where only the rich can afford to go to school. the idea of public higher education will be left aside, all because washington politicians rammed up the bill, took the credit, made an announcement and sent a huge bill to state governments who are struggling with their worst fiscal condition since the great depression. mr. crapo: we see state taxes as well as federal taxes will be going up. i notice our colleague senator johanns has joined us as well. before i ask senator johanns to join us with his concerns and questions and comments, i just want to make one other clarification here. again, we have the president's pledge up here. remember, the motion that i have made simply says let's imply -- make the bill comply with the
president's pledge. if there are no new taxes, the bill doesn't have to be changed if we pass this motion. if there are, it does. but remember, i don't think when the president made this pledge that he was saying he will not increase taxes on a net basis. in other words, i didn't hear the president say, i won't raise your taxes higher than i'd cut them in some other area. he specifically didn't say that he would count subsidies being paid out to those who do not pay income taxes as an offset to any tax increases that he wanted to raise somewhere else. the president didn't get into all these nuances. the fact is the president said he was not going to raise taxes on the middle class. the fact is the middle class is going to see very huge increases under this bill. before i toss the floor to my colleague, i indicate spwefplt estimates only 7% of all americans will receive these
subsidies. out of the 282 million americans with some type of health insurance, only 19 million of them would be eligible for the tax credit for their health insurance. and the rest of the millions of americans are going to be the ones who are paying those taxes, if we can take this chart down now. that's how it ends up, at minimum -- and we're still going through the bill and this number is growing. at minimum, at least 42 million people who make less than $200,000, and frankly, far less than $200,000, are going to be paying a lot more taxes. that's the reason for the motion. i would now yield to my colleague, senator johanns. mr. johanns: mr. president? the presiding officer: the senator from nebraska. mr. johanns: senator alexander really has this right. i had the honor of being the governor of the state of nebraska for six years. the whole idea of balancing the budget is not theoretical to a
governor. you've got to do it. and let me tell you, if i might about our state. many, many years ago, decades and decade ago when our founders wrote our state constitution, they were worried about the state getting itself embroiled in too much debt. and so they said the politicians will be allowed to borrow some money. the limit they put in the state constitution was $50,000. $50,000. so you see, in nebraska, when you're faced with a unfunded mandate like what's happening in this health care bill, i say you get three choices. you can cut programs like k-12 education, higher education, much-tphaoepded services. number two -- much-needed services. number two, you can raise sales
and income taxes, about what you're down to, because that's really where the revenue comes from for states. or the third choice is you get to do both. and i will guarantee to you that none of those approaches are very popular. so, just within the last few weeks our governor, dealing with the recession like every governor in the country, stepped in front of the unicamera like i did many times as governor, and he said my friends we have to cut the spending, just as clear as can be, he said we've got to cut the spending. people are hurting. they're laid off. they're not earning as much. they're not spending as much. therefore our revenues are down. we've got to cut the spending. and they worked over a couple-week period of time. you know what? they came up with a plan. i think it was unanimously approved to cut the spending. to cut the spending. well, now here we are in
washington -- and when you pull the gimmicks out of this bill and actually score it realistically over ten years, this is a multimultimillion-dollar hit to every state, including the state of nebraska. and so what are we hanged off to the state? we're saying guess what? you get a chance here to raise taxes not because of any vote you took on the floor of the unicameral on nebraska, but because of what happened in washington on unfunded mandate. that's what this bill is all about when you look it the expansion of medicaid. i read the reports to senator alexander about the hobt that this might go -- about the possibility that this might go to 150%. keep doing the math. keep loading the unfunded mandates on our state governors. and you know why we're doing this? we're doing it to try to convince the american people that this is a cheaper bill than
it is. but when they figure out that the governor of their state has this problem to deal with and they come to figure out that they're going to pay higher taxes or get less services in education, it will become very, very real to them. i've said many times on this floor, with this bill, reality will set in. and here's another piece of reality. and then you look at the overall bill. about $500 billion in addition to this medicaid mess that we're going to push on to the states, about $500 billion in new taxes. and senator crapo, you put up the promise that the president has made. well, gee, when you're done with that board, we can ceremoniously tear it up because you know what? that promise isn't anywhere near being kept. when he said those things, quite
honestly, there was no way he could deliver with this health care bill. uninsured americans get taxed. insured americans get taxed. families with high-value plans get taxed. high-health cost families get taxed. flexible spending accounts get reduced. small businesses get taxed. and we could go on and on and on to the tune of $500 billion, and that's not evenly counting the unfunded mandate hammer that we're sending to every governor in this nation. a senator: i might add a statistic i was reading here. mr. crapo: if you take out that c.b.o. report, which is what actually analyzes on a nonpartisan basis, the impact of these medicaid expenditures, not including the proposed increase that we heard about overnight, it clearly says -- and i'm reading from the report -- that c.b.o. estimates that state spending on medicaid would increase by about $25 billion
over the 2010 to 2019 period as a result. provisions affecting government in table 3. that estimate reflects state's flexibility to make programmatic and other necessary changes to medicaid and chip. i think that's the statistic my colleague from tennessee was looking for. mr. alexander: i thank the senator from idaho and from nebraska. it is true that in the legislation the estimate is the federal government will pay about 100% of the increased expansion of medicaid for three years and that it will cover about 90% of the cost, which sounds like a lot. but we throw so much money around up here, we have completely lost any appreciation of what that amount of money costs at the state level. and in our state, our governor has said that the 133% increase is about $700 million over five years, and that is a big new tax or a big increase in college
tuitions. if i may ask unanimous consent to put in the record an article from the "wall street journal" on december 4 from the dean and c.e.o. of johns hopkins medicine? the presiding officer: without objection. mr. alexander: the dean of johns hopkins medicine, who in a very sympathetic column which i won't read but a sentence or two of, describing the current health care bill says "even if only half these individuals seek medicaid coverage, such a large expansion would likely have an excruciating impact on the state budget. and maryland is not alone. according to a kaiser foundation survey conducted earlier this year, three-quarters of the states have expressed concern that expanding medicaid could today their fiscal woes. as kaiser note, 33 states cut or froze payment rates to those who deliver medicaid patients."
so what the proposal in the reid bill is may be exacerbated by this deal we've been hearing about, is to shift millions more americans, low-income americans, into a program called medicaid, which only 50% of doctors will see new patients in that program and then send a huge bill to the states which will damage higher education. i say to the senator from idaho, i remember after i was governor, i was driving down the street and i heard on the radio the state of tennessee has done a wonderful thing. it's going to double the number of children covered by medicaid at the same amount of cost. and it was going through my mind that will never happen. that program became the ten care program which has nearly bankrupted our state. mr. crapo: i'd like to thank my colleagues for their comments. could i inquire of the president how much time remains on our side? the presiding officer: 6 minutes. mr. crapo: thank you. i'll make a couple quick comments here and then i'll allow my colleagues from
tennessee and nebraska to wrap up with their final comments. i wanted to raise one additional issue. in the chart that i have here we show what is going to happen with the i.r.s. right now the c.b.o. estimate indicates that because the i.r.s. is in charge of the implementation of so many of the mandates and other requirements in this bill and because of the new taxes that are going to be enforced and collected against the american people, that there will need to be an expansion of the i.r.s. the c.b.o. report says that expansion as high as an additional $10 billion at the internal revenue service. if threes no new -- if there's no new taxes, if there's no increased role of the federal government in the management of the economy in this bill, then why do we need to have the size of the i.r.s. -- which is currently today a a $12 billion institution -- why does it need to grow to almost double, up to $22 billion? the point here, mr. president,
is that the motion that i have made is very simple and straightforward. we can argue back and forth about what the president said or whether this bill has tax cuts or increases in it or whether it does one thing or another, but the bottom line is that with regard to abou 157 million amers who get their health insurance through their employer, they're not going to be eligible for any of these tax credits. all this motion does is to protect those 42 million people that we were talking about who are going to see their taxes go up. 42 million households will see their taxes go up. if the other side is right and what we're talking about doesn't exist in the bill, thefn this ts motion should be harmless. this tells the finance committee to take out the taxes that impact the middle class. and i would ask if either of my colleagues from nebraska or tennessee would like to have -- make any concluding remarks.
mr. johanns: let me just offer a thought or two. senator crapo has hit the nail on the head. if this isn't happening, if in fact the argument of the other side is accurate and this isn't happening and this is some sort of made-up sort of argument, then you're right. this motion will have no effect. so why wouldn't you support the snogs why wouldn't you want the health care bill to reflect the promise of the president of the united states? why wouldn't you stand in and say, look, it's a hard time out there. unemployment is 10%. people are hurting. unemployment, underemployment is 17.5%. this has been as tough a recession as we have seen in a long, long time, and it has hurt real people. why wouldn't you want to stand up for them and say, man, we understand, we have heard you at
our town hall meetings, we've heard you back home, we've heard you and we're going to make sure that we're not going to add to your burden. i appreciate senator alexander putting in that affirm i thought that was a tremendous article. medicaid is chewing up state budgets. i managed one of those budgets. keep in mind, this an entitlement program, no deductibles, no co-pays, no premiums. if you qualify, you get it. and so there's no way really you can manage this budget. it is just exponentially growing. 40% of the docs don't take medicaid patients y? because they go broke on the reimbursement rate. hospitals tell me all across the state of nebraska, we could not keep our doors open on the medicaid reimbursement rate and so what are we doing? we are aiding millions of people to that -- we're adding millions
of people to that problem. they have they'll have an access problem. state budgets will have a problem. they'll be in crisis. and our hospital hospitals wille same crisis. it is the wrong policy, mr. president. it is the wrong course of action. let's start listening to the american people. mr. alexander: mr. president, how much time remains? the presiding officer: one and a half minutes. mr. alexander: mr. president, day in, day out, republicans have come to the floor and said, instead of a comprehensive 2,074-page approach to try to fix this massive health care system all at once in way that raises taxes and premiums and makes medicare cuts, why don't we instead identify the goal of reducing costs of health care to individuals and to the government and take commonsense steps towards that goal?
we've suggested small business health care plans which have been offered, scored by the c.b.o. to save money and expand coverage. we have offered proposals to limit the number of junk lawsuits against doctors. there may be an argument about how much that savings, but there's no argument that that wouldn't drive down costs. we have suggested allowing competition across state lines, creating exchanges. there are efforts in wellness and prevention that we've made specific proposals concerning. and in terms of corralling waste, fraud, and abuse in medicare, and then spending the savings on medicare instead of a new program, that's the republican agenda. pick a goal: reducing health care costs, and move step by step towards that goal in a way that reearns the trust of the american people instead of a comprehensive
2,000-page bill filled with taxes, mandates, surprises and a washington takeover of health care. so there's a real choice here, mr. president. and we regret the fact that we seem to be continuing to move on this track, without the track that we're offering. we want to defeat what's proposed, not in the debate; change the debate towards reducing costs step by step. i thank the president and i yield the floor. the presiding officer: the senator from montana. mr. baucus: mr. president, the senator from oklahoma and others on the other side of the aisle make the charge that this bill increases government. that's not so. it does not increase government. this bill does not increase government. they made that allegation. it is a pure allegation. anybody can allege anything. but let me get the facts.
it's one thoing make an allegation. it is something else to get the facts. the best facts i could come up with is the quote from the congressional budget office letter from senator reid on that point. the congressional budget office says, and i quote on page 16 from a letter -- i don't have the dates of the letter, but there are several letters to several us in the senate -- "congressional budget office expects that during the decade following the ten-year budget win dorks the increases and decreases in the federal budgetary stemming from this legislation would roughly balance out so there would be no significant change in that commitment." roughly balance out. no significant change in that commitment. that doesn't sound like an explosive growth in government to me. in fact, it sounds just the opposite, listening to the congressional budget office and also toaadd to that the budget e
first 10 years decreases the deficit by $130 obama. c.b.o. says, no, no, no significant change. things will roughly balance out according to the congressional budget office. mr. crapo: will the senator yield to a question on that? mr. baucus: this bill controls the government's growth in health care, not increase it. i don't have time right now. if we have another time agreement, we can particular it out of a -- we can take tout of your time. mr. crapo: i'll just ask a question later then. mr. baucus: okay. fine. some of my colleagues try to point health care reform as bad for the economy. nothing could be further from the truth. health care reform would be good for the economy. health care reform is a net tax cut for working americans. a net tax cut. health care reform is essential for our long-term growth.
some say it is a tax increase. it is not. the congressional budget office, it is a net tax cut. if you take all the provisions in this bill that afederal governmen-- thataffect, they coe average tax break for a filer, $1,500 cut for those people. net tax break for affected overall is $441 decrease. so -- it's a long chart. i won't take the time to read it awvment to summarize the chart, affected taxpayers as a percent of all taxpayers, it is over a majority. we'll see a net tax cut. some say, for some there will be a tax increase. let me indicate that's somewhat true. they're getting more wages. of course their taxes will go up
if they get more wages. these tend to be people who might be affected by so-called cadillac plans and the joint committee on tax and the congressional bug officcongressy that premiums go down, wages go up, and obviously taxes are going to go up when wages go up. so that's not really -- it's not fair to say that taxes are going up for those folks in that category unless you also say it's largely because they are income is going up, because their income is going up. i this that i should be pointed out as well. our bill would provide a substantial tax cut t would cut taxes by 40*dz billion in 2017. by $40 billion in 2019 alone. and by a substantial and continuing net tax cuts year after year. the average affected taxpayer with an income under $75,000 would get a tax cut of more than $1,500 in the year 2019.
the bill woo effect more than 92,000 taxpayers a year by 2019. that is reductions. our bill would affect most taxpayers by 2017. the bill would give average taxpayer affected hundreds of dollars of tax relief. not only would mechani health ct taxes it would also address the single largest challenge to our long-term fiscal future. reforming health care is the single most important thing to address budget deficits. the c.b.o. says we will succeed. c.b.o. says our bill would reduce the federal budget deficit in the first ten years. our bill would reduce the budget deficit by roughly $650 billion in the second ten years. that's roughly $780 billion in net deficit reduction. i think that's progress.
that's pretty good. some of my colleagues say, gee, medicaid is pretty expensive. so be careful, congress, what you do, with respect to imposing obligations on states. i remind my colleagues that there are currently certain -- there is a formula that each state must subscribe to with respect to medicaid. i think on average, the federal government pays 50% to 60%. the states pay the rest. under this legislation, we're talking about so-called transitional group, those with expanded -- where the poverty level is raised. in that category -- i've forgotten the exact figure but it is not the old formulas. it is the nur formula. -- it is the new formula. the new formula, the federal government is paying virtually all of it. not all of t but virtually all of it. so the states just get a little
increase in obligation. it is very small, infinitesimal. the underlying point is we've got to reform health care. why is medicaid going up? why are medicaid costs going up around the country? because health care costs are going up. health care costs for seniors, low-income people, for everybody. there's 10e7 so many parts of ts bill which address that problem, address health care costs, to get health care costs down. i would think all state governors would want this birl to pass. why? because we're going to begin to go down the road of lowering health care costs. then those medicaid budgets will be more under control. we have to lower medicare health care costs in this legislation -- and this legislation does that. so health care reform would very much help the comirks not just in the near term with substantial tax cuts, but would also help the economy in the long term with substantial deficit reduction and also with all the provisions we're putting in that would lower hoke health care costs overall.
it is clearly the right thing to do. i believe this legislation should definitely pass. just to remandate m remind my c, for folks making more than $250,000 they'll pay more taxes, those folks are not seeing tax rates increase. those folks are going to pay more taxes because they're going to get pay raise. in effect, because their incomes will go up, they're going to paid more wages. okay, mr. president, i've got nor say, but i see my colleague from vermont and florida. i'll yield -- how much time is remaining, mr. president? in this block? the presiding officer: 19 minutes. mr. baucus: i yield 15 minutes to my friend from vermont. mr. sanders: before i get into the subject i want to talk
about, which is drug reimportation, i want to say that i find it interesting that my republican friends are spending a whole lot of time down here on the floor attacking health care legislation. i suppose it's at least a positive thing that they're beginning to talk about health care. er you know, they ran the government from 2000 to 2006. they had the president, the house and the senate, and at that time health premiums soared. millions of americans lost their health insurance. where were th? where were they in beginning to come up with ideas to control health care costs and provide health care to more americans? they weren't there. having said that, let me also say that i have problems with the bill that's currently on the floor. clearly it does a lot of things that are good, but there are weaknesses in this bill in terms of cost containment that we have got to address. when some of my friends talk about expanding medicaid and the problems associated with that, they make a good point.
we need to significantly expand our primary health care capabilities, which means more community health centers, which means more primary health care physicians. and if we're not able to do that while we add 15 million more people to medicaid, frankly, i'm not quite sure how we're going to deal with the medical needs of those people. so one of the imperatives, i think, that has got to happen as we proceed on this bill is that we have got to support the language in the house which substantially increases funding for community health centers and for the national health service core so that we give a primary health care infrastructure, clinics and doctors to begin to serve the millions more americans who are going to be coming in to the health care system. that's one issue. the other issue i wanted to focus on today -- and i'm here because senator dorgan, who is the sponsor of this legislation, is unable to be on the floor at this time -- deals with a prescription reimportingation.
and this is an issue that i have worked on for many, many years. when i was vermont's representative in the u.s. house, i believe i was the first member of the congress to take american citizens over the canadian border -- in this case to montreal -- in order to purchase affordable prescription drugs. mr. president, i will never forget -- never forget -- the bus trip that we took over from st. albans, vermont, to montreal, canada. on that bus there were a number of lower-income women who were struggling with breast cancer. many of them were using the widely used breast cancer drug called tamoxifen. we got off the bus in montreal and we walked into the drugstore, and that had all been prearranged. and they walked in there and they purchased tamoxifen. and at that point -- and i'm thinking it's about ten years ago. it was awhile back. at that point they paid in american dollars one-tenth of
the price for tamoxifen in montreal, canada, than they were paying in the united states of america. one-tenth of the price for lower-income women who were struggling for their lives. so when you talk about morality here, i want some of my friends to explain why it is that the american people are forced to pay by far the highest prices in the world for prescription drugs. talk to physicians in vermont. there is a doctor that i know in northern vermont. she writes her prescriptions. one-third of her patients cannot afford to fill the prescriptions. so what's the sense of an examination, a diagnosis, writing the script when your patient can't fill that scrip? the high cost of prescription drugs in this country is one of the major health care crises that we face. it is an issue that we have got to deal with. and we have simply got to ask ourselves why it is that the same exact medicine in this
country costs substantially more than it does in canada, australia or all over europe? you know, mr. president, there has been a lot of concern in this country about the lack of bipartisanship. well, i have to say that on this issue there is bipartisanship. that was true when i was in the house, and that is true here in the senate. and let me just read to you the cosponsors of this legislation, democrats, republicans, independents. and i'll read them in alphabetical order. the bill was introduced by senator dorgan. cosponsors: senator begich, senator boxer, senator casey, senator conrad, senator feingold, senator inouye, senator klobuchar, senator leahy, senator lincoln, senator mccaskill, senator sanders, senator snowe, senator stabenow, senator thune, senator bingaman, senator brown, senator collins, senator durbin, senator grassley, stphorb johnson --
senator johnson, senator kerry, senator kohl, senator levin, senator johnson, senator shaheen, senator specter, senator tester. widespread bipartisan support for legislation which says let's end the absurdity of the american people having to pay substantially more for the same exact medicine that is sold in other countries around the world. let me just take a look at some of these charts. to begin with, we all understand that when you deal with the drug companies in the pharmaceutical industry, you are dealing with some of the most powerful lobbyists and forces right here in washington, d.c. these people spend huge amounts of money on campaign contributions, huge amounts of money in lobbying. just recently in order to make sure that they got in under the
wire, in case there was some real reform passed here in washington, they substantially raised their prices for particular drugs just in the year 2009. and here is the chart right here . single 12%, plavix12%, lipitor 5%. bonivar18%. and one of the reasons that health care costs are soaring in america, one of the reasons that many seniors are having such a difficult time with health care costs is precisely the rapid rise of prescription drugs. now, what i want to talk about now is this chart, just something that is really inex-politickible, i think, to
the -- inexplicable, i think, to the average american. here's lipitor. in canada, it costs $33. france $53. spain, $32. the united kingdom, $40. the u.s. a., $125, four times as much as it costs in canada. you explain that to me. same exact medicine, made in the same exact factory, same exact bottle. and that is why, by the way, in the state of vermont and all across the northern tier people every day going over the canadian border, using the internet to buy those drugs. so what we are saying in this legislation, let's end this absurdity. we are living in a global economy. i have a lot of problems with the global economy in many ways. but if when we go christmas shopping the only products we can find are made in china -- because we don't do too much
manufacturing in america -- and if when we eat lunch we get lettuce and tomatoes from all over the world, what people are asking, why is it that we can't bring into this country f.d.a. safety approved medicine? we can bring lettuce in from the back woods of mexico. that's okay. but somehow when we have a handful of major pharmaceutical companies, presumably it's just too difficult to be able to bring them in safely to the united states. nobody believes that for one moment. let's take a look at another drug. plavix, same story. canada $85. france $77. germany $85. neglect land $77 -- netherlands $77. and in the u.s.a., $133. same medicine. nexium, wow. somebody explain this to me, i really would appreciate it.
nexium. canada $65. germany $37. spain $36. u.k. $41. united states of america, $424. five, six times more than in the united kingdom. and people wonder why americans are running over the canadian border or they're on the internet trying to get this medicine. why is it that the drug companies charge $424 here and $41 in the u.k.? well, the reason they're charging it is because they can charge it. if you walk into your drugstore tomorrow, you can find that the prices that you pay double, triple, because in this country we're the only country in the world that does not have in one way or another some kind of regulation on prices because all these countries, by the way, have national health care programs. that's another reason why their drug prices are much lower. we don't, of course. but at the very least what
re-importation is about is saying in a global economy, when all kinds of products all over the world, we buy every day products from other countries, let the consumer, let the pharmacist, let the prescription drug distribute tor be able to take advantage of the global economy. i am not, i must confess, a greater supporter of unfettered free trade. i think that has in many ways been a disaster for american workers. but that to the degree that it is here, the degree that business people can run to china and pay workers there 50 cents an hour, that is the global economy. well, here's the global economy. canada $65. u.k., $41. u.s.a., $424. why can not prescription drug distribute tors buy their products in the u.k. and bring them back here so we can safely distribute the drugs for all
americans? now, some of my friends in the pharmaceutical industry, it's impossible to bring medicine in from abroad. it can't be done safely. "the washington post," 40% of active ingredients in u.s. prescription drugs currently come from india and china. well, i guess that's okay for the pharmaceutical industry when it adds to their profits, but we can't do that to lower costs for the consumer. the "wall street journal," february 21, 2008, "more than half the world's heparin, the main ingredient in a widely used anticlotting medicine, gets its start in china's poorly regulated supply chain." well, i guess that's okay too. so, where we are, mr. president, is one of the many health care crises that we face in this
country is the high cost of prescription drugs. and i think there is a lot that we have to do, whether the congress is capable of standing up to the drug companies and all of their money and all of their lobbyists remains to be seen. but this is, quite frankly, a no brainer. for all of my colleagues here who believe in unfettered free trade, please do not be total hypocrites. if you believe in unfettered free trade -- which i happen not to -- if you believe it's okay for american companies to shut down and run to china, if you think it's okay for people to buy any product anywhere in the world, tell me why we can do that for everything except for prescription drugs. there is no rational explanation. this is legislation which has been around for years. the drug companies have fought it successfully for years. we now have widespread tripartisan support here in the senate. a lot of support, i know, in the house.
let's finally stand up for the average american. let's substantially lower the costs of prescription drugs. let's pass prescription drugs re-importation. and with that, mr. president, i would yield the floor. i would suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
mr. mccain: i ask unanimous consent that further proceedings under the quorum call be suspe suspend. i ask what the parliamentary situation is. the presiding officer: without objection. mr. mccain: is there an agreement, i would ask my friend from montana? i don't want to encroach on anybody's time. but a bay i think we rescind the quorum call first. mr. mccain: i asked. the presiding officer: the quorum call has been dispensed with. mr. mccain: fine. and could i ask what the -- is there a previous agreement on time? the presiding officer: the next hour is equally divided with ten minut ten-minute limit. mr. mccain: thank you. mr. president, i rise in behalf of the amendment which, according to the congressional
budget office, this amendment would provide an estimated $100 billion or more in consumer savings over ten years. that's unique to this bill. it's unique to this legislation. it actually saves the taxpayers money. i think it's important, mr. president, to -- for us to go back and see how we got here. again, with the administration and the president reversing his previous position in favor of drug impureation, or the president's chief of staff, dr. rahm emanuel, reversing his position on drug reimportation. a lot of it has to do with the deals that have been made. i refer to the august 6, 2009, "new york times" article, "pressed by industry lobbyists, white house officials on wednesday assured drug makers that the administration stood by a behind-the-scenes deal to
block any congressional effort to extract cost savings from them beyond an agreed-upon $80 billion." and then it goes on to say, "we were assured. we need somebody to come in first. if you come in first, you'll have a rock-solid deal. billy saw design, who now leads the trade group, said wednesday, who is he's ever going to go into a deal with the white house again if they don't keep their word? they're just going to duke did out instead." it is a potential and secretive game that the obama administration has played it is a tries to line up support from the descrai groups, even as their lobbyists push to influence the health measure for their benefit." mere is the important point of this article. i would ask unanimous consent that this article from "the new york times" be put into the
record at this time. the presiding officer: without objection. mr. mccain: mr. tow sedan said the administration had a approached him to negotiator. "they want add big player to come in and set the bar for everybody else. he said the white house had directed him to negotiator with senator max baucus, the business-friendly montana democrat who leads the finance committee. mr. tauzin said the white house had negotiations throughout, moving away from ideas like the government negotiation of prices or the importation of cheaper drugs from canada." my goodness. my goodness. they blessed the deal, mr. tauzin said. so that's how -- so that's how we got here with the administration coming over with a letter last night basically saying they would oppose -- or certainly impede -- the ability
of americans to import drugs from dan. so, what -- from canada. so what have we seen happen from the interim? here again is a "new york times" article entitled "drug makers raise prices in face of health care reform." and here is a graphic demonstration of it. so this little line right here, i would say to my colleagues, is inflation -- is inflation in this country. and if you look at it, for the year 2009, inflation is actuall -1.3%. now look the the wholesale drug prices. annual change, 8.7%. so while inflation has gone down 1.3%, actual cost of drugs have gone up 8.7%. so, the article from "the new york times" says, "even as drug
makers promise to support washington's health care yeefer haul by shaisk $8 billion over the nation's drug costs after the legislation is effect, the industry has been raising its prices at the fastest rate in years. the last year the industry has raised the wholesale prices of brand-name prescription drugs by about 9%. this will add another $10 billion to the nation's drug bill." so let's get the math right here, my friends. the drug companies have offered to save the american consumer $8 billion a year and, guess what? they have increased their prices where it will add more than $10 billion to the drug bill of america's citizens, including our seniors. so the math is, they agreed to $8 billion reduction. they actually will -- have already this year seen an increase of more than $10 billion. so they're on track to make a $2
billion profit off of their deal. no wonder they made a deal. it's -- they add more than $10 billion to the nation's drug bill which is on track to exceed $300 billion this year. by at least one analysis, it is the highest annual rate of inflation for drug prices since 1992." and this again -- this is the consumer price index right here, the consumer price index. fallen by 1.3%. drug makers say they have valid business reasons for the price increases. critics say the industry is trying to establish a higher price base before congress passes legislation that tries to curb drug spending in coming years. so that's what this is all about. they increase the prices so that it reaches a certain level, and that's what they will negotiator
on. and they already are in line to experience $2 billion more in profit than the $8 billion that they can say they intend to cut. what a ponzi scheme this is. a harvard health economist -- excuse me -- when we have major legislation anticipated, we see a run-up in increases, said steven w.shandelmeyer, from the university of minnesota. he has analyzes drug pricing, et cetera. a health care economist, joseph newhouse said he found a similar pattern of unusual price increases after congress added drug benefits to medicare a few years ago. giving tens of millions of older americans federally subsidized drug insurance. just as the program was taking effect in 2006, the drug company raised prices by the widest margin in a half a dozen years."
so we've seen this scam before. we have seen it before. and so what is the administration going to do? the administration sends a letter, i believe last night, not to the sponsor of this legislation, senator dorgan, but to another member basically saying they would have to examine the health and safety. since when is a prescription drug imported from canada a threat to american's health since they obviously have the same standards that we do? the letter is to senator carper, and it's signed by margaret ha the drug -- the dorgan importation amendment seeks to address these risks. it talks about our amendment. "we commend the sponsors thor their efforts to include numerous protective measures in the bill that address the inherent risks of importing foreign products and other safety concerns relating to the distribution system for drugs
within the u.s." however, as currently written, the resulting structure would be logistically challenging to implement and resource-intensive." now, let's get this straight. according to c.b.o., if we pass this, we would save consumers $10 billion -- exqueue excuse m0 billion. according to c.b.o., we would provide an estimated $100 billion of consumer savings over ten years. that's what the c.b.o. says, okay. but what this obviously heavily overburdened margaret hamburg, the commissioner of food and drug says, "however as currently written, the resulting structure would be logistically challenging to implement and resource-intensive." , oh, oh, my god. i'm going to have to include for the record the number of employees that are over at the food and drug administration. i'm sure they're full up with
their responsibilities at present. in addition, there are significant safety concerns related to allowing the importation of nonbioequivalent products and safety issues related to confusion and distribution and labeling of foreign products -- boy, that's, that's -- when we see something come in from a foreign country, it is so confuse whawg look at the labeling of it. it is a remarkable challenge for the american consumer. "the confusing and distributing of foreign products that remain to be fully addressed in the product." but, but -- she goes on to say to senator carper, who is not the -- a fine and great member of this body but not the sponsor of the amendment -- i ask for an additional 30 seconds to finish. the presiding officer: without objection. caisson cane "we appreciate your strong -- mr. mccain: "we appreciate
your strong leadership on this and we look ford to working with you to develop an avenue for the importation of safety safe and effective prescription drugs from other countries." translated: the fix is in. so, madam president, we'll be back on the floor on this. and, mr. president, i'll be back on the floor on this. and i strongly urge the adoption of the amendment. i yield the floor. mr. nelson: mr. president? the presiding officer: the senator from florida. mr. nelson: mr. president, well, i'm back on the floor on this, as i have been over the course of the last decade, because we've been like a yo-yo in my state of florida on the importation of drugs, since i have quite a few senior citizens in our state. they have been accustomed to either going to canada and bringing back prescriptions at half the price or phoning in
canada to pharmacies and having those drugs shipped in the postal service, or e-mailing to canadian pharmacies. and what happened over the course of the last eight or nine years is that the previous administration cracked down on the re-importation of these drugs. and of course that was at a great expense to our senior citizens who can buy these drugs at roughly one half of what they pay by going into the pharmacies here in the united states. and then an interesting thing happened along about 2006, because this senator started getting multiples of calls, i think up to something like 100
complaints in that one year of 2006 from senior citizens who had purchased the drugs either by e-mail, by telephone, or by going personally and having them shipped. and lo and behold, under the previous administration they gave the order to the postal service to confiscate these drugs. well, this happened, for example, to a couple from mount dorr, florida. john and lee -- no, it's mr. and mrs. lee eads, e-a-d-s from mt. dorr, florida. they had their drugs confiscated. we went after the customs service. we found a lot of those drugs we
had gotten in, those drugs had been confiscated when in fact the policy was supposed to be if it was pharmaceuticals for a personal use and they defined that as less than 90-day supply, that the government, the united states government was going to let these senior citizens take advantage of getting that cost break of a 50% reduction. well, it took us in late 2006 getting into this with mr. and mrs. eads as the poster couple who had been getting their prescription drugs, and then all of a sudden they're confiscated. we got the postal service and customs to reverse, and this had
supposedly been the policy but we can't get it etched into law because people keep bringing up this trojan horse that it's not safe. well, if the very manufacturers that we are buying our prescriptions here in american pharmacies are the same manufacturers in the identical locations with the identical labeling that are the drugs that are going to canadian pharmacies, why can't we give our senior citizens a break? now, of course, what this senator would like to do is to give them a bigger break. this senator has an amendment
which it's continuously being stated that i may not get to offer my amendment, that would cause the pharmaceutical industry to give discounts on the drugs sold under medicare that are being sold to 6 million people that are eligible because of their low income for medicaid but get their drugs through medicare. those 6 million people -- medicaid, poor people that are eligible to get government assistance -- used to have a discount, a substantial discount. and, therefore, the u.s. government was paying less for the drugs that it bought for those people. but six years ago when the prescription drug benefit was
passed, those 6 million people were suddenly made ineligible to get the drug discount because they were now getting their drugs under medicare. well, that's absolutely ridiculous that the united states government is going to pay full price for the drugs now that they used to pay only a fraction? how much is that worth? well, according to c.b.o. and the amendment that i offered in the senate finance committee that was defeated 10-13, according to c.b.o., that is worth $106 billion over ten years that would be savings to the american taxpayer that we would be paying just for those dual eligibles, medicaid recipients that get their drugs in medicare, would be $106
billion of savings that the united states government would not have to pay for those drugs if we followed the same policy that we did back there before this prescription drug benefit from medicare. now, that kind of makes common sense, doesn't it? that you want to save the american taxpayer $106 billion. but we were defeated by a vote of 13 opposed to my amendment and 10 in favor in the finance committee. now i know it's a tall order to bring this amendment out here on the floor and have to get a 60-vote threshold, because 41 senators can deny the american taxpayer from getting $106
billion of savings. you know, one of the good things about our bill that has come to the floor is we're going to reduce the deficit by $130 billion, and that's over a ten-year period. and that's a good thing. but if we would accept my amendment, we could reduce the deficit by $236 billion. or we could use part of it, say half, to fill the rest of the doughnut hole that the aarp would like, and so would this senator. the aarp strongly supports my amendment, and they have made it clear to the leadership of this united states senate that they want to see that doughnut hole
closed. but there's nothing coming out here on the floor that's going to do that. this amendment that senator dorgan has offered which just in and of itself is good policy -- reimporting drugs at half the cost from canada -- is a step in the right direction, but that doesn't close the doughnut hole. so, here we are at a decision point. who are we going to serve? now let me say at the outset that i understand the political dynamics here, and i want to give credit where credit is due that the pharmaceutical industry is in fact supporting the leadership in trying to pass this bill. and that's a good thing.
and we appreciate that very much. and we need their support because you have all these other interest groups that are flaking off. and at the end of the day we have to get 60 votes here in order to pass health care reform. and that includes health insurance reform. and we've got the insurance industry just totally flat-out trying to kill this legislation. so i'm grateful to the pharmaceutical industry for trying to help us. and, therefore, my plea is there's got to be a balance. there's got to be a compromise in the works. there's got to be a way of the pharmaceutical industry stepping up to the plate to help us totally fill the doughnut hole -- that gaping $3,000 hole -- that seniors have to pay
all of the drugs that they buy when they reach that level. there's got to be a sweet spot, a compromise. and so, mr. president, i certainly support this amendment, and i hope that the senate will favorably consider my amendment later on. thank you, and i yield the floor, mr. president. mrs. hutchison: mr. president? the presiding officer: the senator from texas. mrs. hutchison: mr. president, how much time is remaining on our side or is it back and forth now? the presiding officer: 19 minutes on the republican side, and senators are limited to 10 minutes each. mrs. hutchison: thank you. thank you, mr. president. mr. president, we have been talking on the crapo amendment about the new taxes that are in this bill. and there are so many new taxes that it's really going to increase the cost of health care to every individual who has
health insurance, and it will also tax the people who don't have health insurance. and it will tax the people who have too much health insurance. so, the taxes in this bill are almost mind-boggling. yesterday we talked about the cuts in medicare. but we're also talking now about the $500 billion in tax increases. $500 billion of tax increases. and what senator crapo's amendment will do is to say that we want to go back to the promise that was made by the president that no one who makes under $200,000, or a couple who makes under $250,000 would have any tax increases. it just recommits the bill and takes out everything that would tax individuals at that level because the promise was made to the american people. so, senator crapo's amendment
would certainly affect those who have high benefit plans which are going to have a 40% excise tax in this bill. if your plan is considered high benefit and you make under $200,000 a year or you're a couple making under $250,000 a year, you should not have to pay because your benefits are better than the government has said they should be. so we would help the union member, for instance, because the unions do have high-benefit plans. we would help those union members who are making under $125,000 a year or $200,000 a year if they're single to just make sure that they're not going to have to pay a tax for having too much coverage. and then there are the individuals who have no coverage or too little coverage who are going to have to pay an individual tax in this bill of
$750. surely if someone can't afford to have health insurance, we should not be taxing them. certainly not. so the crapo bill will assure -- the crapo amendment would assure that when this goes back to the committee that someone would not be subject to the individual mandated tax if they make under $125,000 a year, which they surely probably do. or if they have a high-benefit plan and they make under that amount. it's just trying to say that that promise that the president made would be kept. i'd like to also talk about another issue that is in this bill, and that is that you would think that the bill takes effect in 2014, so the taxes would take effect in 2014 as well. that everything is going to come together and start in 2014.
that's what you would think. you would be wrong. that is not the case. in fact, the biggest part of the taxes in this bill will take effect next month. less than one month from now the taxes that are going to increase the costs of health care premiums, prescription drugs, equipment that you would use for medical devices, the taxes start next month. so, the bill opposes taxes for four years before any person would be able to sign up for any of the plans that are going to be available presumably under this bill. so let's walk through this. $22 billion in taxes on prescription drug manufacturers would start next month.
$19 billion in taxes on medical device manufacturers next month. $60 billion in taxes on insurance companies across the board, next month. so what's going to happen? of course the cost of all of those items will go up americans will start paying more in insurance peoples. premiums. americans will pay more for their prescription drugs and more for their medical devices, because those taxes start next month for supposed programs that are going to start in 2014. well, maybe you would think that the benefits would start coming in 2011, 2012, 2013. not at all. nothing starts in benefits or
programs until 2014. but there are more taxes come before 2014. in 2013 the taxes on the high benefit plans take effect. $149 billion. this will ahelicopte affect uni, certainly people making un$125,000. they will be affected in 2013. but any benefits of this bill would take effect later. the limited itemized deduction is also changed. under this bill you would have to have 10% of your income before you could start deducting your medical expenses. now, this is for people who have a terrible accident or debilitating high-cost disease, cancer treatment, maybe a clinical trial.
so present law is 7.5% of your income and you can start deducting these expenses. but the new bill starting in 2013, you have to go to 10% threshold before you can have those deductions. that would be another $13 billion in taxes to individuals. and, finally, in 2014, after four years of taxes and increases in premiums and medical devices and prescription drugs, then you would start seeing the rest of the bill take effect. so in 2014 you still have more taxes. $28 billion in employer tax -- and employer taxes will start in 2014. these are for employers that can't meet the threshold of what they will have to cover for their employees or individuals who cannot afford hc wil healthe
will have $8 billion in taxes and that starts in 2014. so, mr. president, i'm working with senator thune. there will be a hutchison-thune motion to recommit this bill that will say the taxes start when the implementation of the bill starts. i think that is just matter of fairness. we want to recommit the bill and say everything should start at once. how can we tax people for four years, raise their prices on insurance premiums, raise their prices on drugs, raise their prices on medical devices when they get none of the opportunities that would be in this bill until 2014? so i'm going to be working with senator thune, senator grassley, senator hatch to try to make the corrections in in bill that would -- in this bill that would just present a fairness to the public. transparency and fairness to the
public about what these taxes are and when they start. and then when the implementation of the program starts. it is so important that we have the ability to say to the american people if this bill passes, you're not going to be taxed. your prices are not going to go up. your premiums are not going to go up anymore than they already are caused by the increased prices in this bill at least until the bill is implemented. so we're going to try to do that for the american people in this bill very soon. so i'm very much looking forward to talking about this. you know, i talked to someone just last night that heard us starting to talk about the taxes in this bill -- the presiding officer: the senator's time has expired. mrs. hutchison: they were astounded. so, mr. president, we're going to try to give relief to the american people and hope that we can have a bill that will truly
not have the taxes and mandates that are there now that start four years before the bill is implemented. thank you, mr. president. i yield the floor. mr. baucus: mr. president, i yield 10 minutes to the senator from michigan. ms. stabenow: thank you, very much. the presiding officer: the senator from michigan is recognized. ms. stabenow: thank you to our distinguished chairman. i have 11 unanimous consent requests for committees to meet in today's session of the senate. they have the approval of the majority and minority levels. i ask unanimous consent that these requests be agreed to and these requests be printed in the record. the presiding officer: without objection, so ordered. ms. stabenow: thank you very much. mr. president, i rise today to speak concerning an amendment that i'm proud to join the senator from north dakota, senator byron dorgan and other colleagues in an effort to lower the cost of prescription drugs. but i do want to just make one comment today and -- because we know that overall our plan -- i want to make one comment on
compare before i do that. -- on medical care before we do -- medicare. we know it is about saving lives and that's what we're doing in our healthcare reform. i do want to mention and stress again that this is about saving medicare and our commitment. i do have to say that we have been hearing colleagues and the distinguished republican leader has said over and over again that, in fact, cutting medicare is not what americans want. and then last night said here on the floor that expanding medicare was a plan for financial ruin. and so they don't want to cut, don't want to expand. i'm not sure where our colleagues on the other side are in terms of medicare. but i know where we are, mr. president. i know we, the party that created medicare, with president johnson at the time.
we, the party that has continued to promote expand and strengthen medicare, we are the party that intends to make sure that we save medicare for future. expanding prescription drug coverage costs that will be able to close the doughnut hole. be able to expand the ability for seniors to have extended care and extend the life of the medicare trust fund. i want to speak to the other two provisions that we have as our priorities, saving lives and saving money. the dorgan, and others amendment, which i'm proud to join senator dorgan on does exactly that. it will save lives an save money. -- and save money. the senator from michigan and i know very well, we can just look across the detroit river in windsor and know that the people of michigan, by going across the
bridge, are able to drop their costs 30%, 40%, 50%. there's something wrong with a system where americans are paying so much more than those for other countries for the same drug, the safety provisions are the same. the difference is there have been protections put up at the american board are to stop americans from getting the benefit of having our hospitals, our pharmacies, our schools of medicine, others who use prescription drugs to be able to bring that back, to do business across the border. everyone is talking about open borders, open trade. this is a trade issue. about bringing back f.d.a. prescription drugs across the border to the american side so that americans have access to lower-priced medicines. mr. president, it has been about 10 years since i did my first bus trip to canada with seniors.
i've been doing that a long time. i've been focused in my days in the house of representatives where i took the lead on this issue as well as working with colleagues now in the senate. it is time to get this right in the context of health care refork. it ire -- reform. i want to tell you story. i've heard so much from people in michigan. here is a recent story of someone who has written to me. joe is a 40-year-old father with heart disease. his family says despite his heart condition, he's doing well, loves to work. his medicines cost over $4,800 a month. can you imagine that? but his insurance has a family cap of $10,000 a year. in other words, after basically two months, he hits the cap and he has to pay for everything out-of-pocket. by going over the bridge to canada -- and we have three
bridges up in the upper peninsula, we have a port huron and the largest cross border bridge in terms of volume of goods and services in the -- on the northern border. but by simply going across the bridge, joe would be able to save $2,000 a month. we should be able to do better for joe and his family. he could save $2,000. almost half of his costs. by simply buying the same drug, f.d.a. approved, but buying it from one side of the bridge instead of the other. we also know that cholesterol-lowering drug lipitor is 40% less. also previcid is 50% less according to the search on pharmacy checker.
and we have to say, again, this is really a trade issue and whether with we going to -- whether we're going to continue to have trade barriers much lipitor is made in ireland and pfizer is able to bring it back to america. they can bring it back. but if someone wants to go to windsor, canada, right across the bridge and purchase a lower-priced version of the very same drug lipitor, and bring it back as an individual or business or pharmacy or a hospital, it's illegal. it's illegal. that makes absolutely no sense, mr. president. so this amendment is about opening the border, allowing our pharmacies, allowing our wholesalers, allowing hospitals. i've gotten calls from medical schools at universities wanting to do business to lower their costs with wholesalers in other countries where it's f.d.a.
approved safe to do that. that's what this bill is about. right now we're in a situation where if we do not pass the pharmaceutical market access an drug safety act -- and drug safety act, which we have introduced on a bipartisan basis, we're going to continue to have a situation where people, like joe, a 40-year-old father with heart disease, is going to be paying $4,800 a month out of his own pocket when we could cut that down. it still would be tremendous, but we could cut that by $2,000 for him, mr. president, in bypassing this ltion. ththis legislation. the drug importation bill has been reported. we have been working with aarp, the an and the cato institute.
very different groups philosophically, but they all agree we need more competition. we need to open the border to safe -- and i emphasize and underline safe f.d.a. approved prescription drugs. so that we're focused on not what's best for the pharmaceutical industry, brand named companies, but what's best for american citizens that are struggling that see their prices go up 5%, 6%, 8%, 10% every year. they cannot sustain that. how many of us stood on the floor and talked about the fact that people are choosing between food and medicine. that's not just rhetoric. it's not rhetoric. it's real. it's real for people right now today. it's getting cold. it's getting very cold. people are deciding, am i going to keep the heat on or get my medicine. am i going to be able to get my food? am i going to be able to get my
-- pay my mortgage or get the prescription. or my child's life or wife's life to live a successful life. that's what this is about. we have an easy straightforward way to increase competition to bring down prices with safe, strong -- strong safety standards. this is something that makes sense. it will help seniors. it will help people with disabilities who are in the doughnut hole before we get that all closed under medicare. it will help every family and every individual right now who needs medicine and is paying more and more, higher and higher prices every single year. mr. president, i hope that we will have a very strong bipartisan vote. this is a very important
addition to what we are doing here. this truly will save lives an -- and save money. that's what we're all about to create competition to bring prices down so that the american people have access to the medicine and the health care they need and deserve. thank you, mr. president. a senator: mr. president? the presiding officer: the senator from texas is recognized. mr. cornyn: thank you, mr. president. mr. president, i want to speak briefly about keeping president obama's promise to the american people when it comes to tax increases in this health care bill. you will recall on september 12, 2008, he said -- "i can make a firm pledge, under my plan, no family making less than $250,000 will see their taxes increase -- not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your taxes." the problem we see, though, is
that this bill as proposed increases taxes for 25% of taxpayers earning less than than $200,000 a year. that's 42 million individuals and families who will be taxed in a way that violates president obama's pledge. according to the congressional budget office, the internal revenue service will need many, many more agents and workers in order to enforce the reid bill. it will essentially need to double in size the internal revenue service just to be able to raise those taxes called for in this big job-killing bill. the possibility of higher taxes is one reason why job creators are currently standing on the sidelines. you know, the president had a job summit yesterday, spoke at
brookings institute, talked about initiatives he was going to undertake in order to help create jobs in this country, but the fact of the matter is government doesn't create jobs except to the extent we grow the size of government. what we need to do in this country is to get out of the way, reduce the burden, limit the uncertainty for the private sector. small businesses that are the primary job-creating engine in this country. but the fact of the matter is that job creators are nervous. strike that. they are not nervous. they're scared about one job-killing proposal after another coming out of washington. not just the spending, not just the debt, but that they see things like this big health care bill and the increase in taxes that go along with it. then they see the president going to choap -- copenhagen and perhaps trying to obligate our country with some additional financial burdens that are going
to make it harder for these job creators, not easier. the debt, for example, is one looming disaster. the total public debt now stands at $12 trillion. before the end of the month, the majority leader is going to come to the floor presumably on a defense appropriation bill or some other vehicle and ask us to lift the debt limit because congress has maxed out the american people's credit card, and we can't keep running the government unless we increase the debt limit. well, a number of us are not going to vote for that increase in debt limit until we receive firm assurances that the administration and the majority is going to get real about this increasing debt and unfunded federal liabilities in medicare and medicaid and other entitlement programs. but we're accumulating debt even faster during this fiscal year. for example, for just two
months, two months of this year, the congressional budget office says an additional $292 billion in deficits were accumulated. our deficits will average nearly nearly $1 trillion for every year during the next decade, according to the obama administration itself. and, of course, i mentioned the other unfunded liabilities out there, things like medicare. now, i understand the majority has somehow cut a tentative deal to try to grow medicare. well, if you grow medicare and grow medicaid, you know, what does that do to the already already $38 trillion in unfunded liabilities? this $38 trillion is three times our national debt. it means in essence a debt burden of $322,000 for every u.s. family, yet my colleagues don't seem to be fixing -- desirous of fixing this problem. they seem determined to make it worse.
well, yesterday "the washington post" reported on our nation's deteriorating fiscal situation. they said -- "the problem is that investors think the united states isn't fiscally responsible." well, i wonder why they would conclude that. but they go on to say -- "they could start demanding much higher interest rates when they bid on treasury securities." that is, when they start buying our debt as a result of all of this spending and the money we have to borrow from china and other countries that buy our debt he. those countries could begin to demand higher interest rates. and the feedback loop, "the washington post" says, could get ugly. the nation could have to borrow hundreds of billions of dollars just to pay interest on what we owe. and this has been touted, they say, as a classic path to irreversible national decline. the postcited leonard berman who
said right now this year we have have $1.6 trillion in debt coming due, and that's before we pass this ill-conceived health care bill. he said right now that's roughly twice individual income tax revenue. our only plausible strategy for paying that back is to borrow more money. the postalso cited david m. walker, the former comptroller of the united states who recently testified our total federal financial hold is about about $10 trillion more than the current estimated net worth of all americans. and the gap has been growing. and then, adding insult to injury, yesterday "moody's investor service" said its debt ratings on u.s. treasuries securities may, quote -- "test the aaa boundaries" because the government's fiscal status is
worsening. well, the fact is this reid health care bill makes this much, much worse. my colleagues say that the c.b.o., the congressional budget office, has scored the bill as deficit neutral. well, any bill can be called deficit neutral if you're willing to raise taxes enough and cut programs like medicare, which this bill does, both of which they do. the congressional budget office said in their score of the reid bill -- "the long-term budgetary impact could be quite different if key provisions of the bill were ultimately changed or not fully implemented." well, what could they mean by that? what they mean is some of the assumptions about the cuts and other things that range over a ten-year budget window, if they don't come true, then all bets are off. we know the reid bill relies on budget gimmicks to hide the true costs of this washington takeover. one gimmick is, for example, not including the medicare provider fix, the so-called doc fix which costs $210 billion over ten
years. in other words, this bill leaves that out entirely, and i know -- i'm confident because congress has only failed to act to reverse those cuts on one occasion -- that if we let this cut in provider payments to physicians be fully implement i, a 23% cut come january, then many medicare beneficiaries including the vastly expanded roles that would be included under this deal we have read about in the paper, they won't be able to find a doctor to see them because doctors will not be able to continue seeing patients with 23% cut in the payments that they are entitled to under medicare. the other issue is the time shift. this is really sort of the classic shell game. the reid bill starts the tax increases and the medicare cuts in 2010, but as we know the expanded coverage doesn't start until 2014. someone said that's like buying
a house, closing on the sale of a house and being told, well, you can't move in for four years. you've got to start paying the bill today, but you don't get the benefits for four years. and the congressional budget office score focuses only on the budgetary impact of the government, not on the total cost to the american people. the c.b.o. said the reid bill increases the federal budgetary commitments to health care. in other words, rather than trying to bend the cost curve as we have heard should be the goal, this makes it worse. we end up bending the cost curve in the wrong direction. the reid bill will increase premiums for american families purchasing insurance in the individual market, and the congressional budget office hasn't yet been given time to estimate the total cost on the economy as a whole. david broder, one of the deans of the washington press corps, did a nice roundup of the nonpartisan experts last week. he cited robert bixby of the
concord coalition, maya mcginnis of the committee for responsible federal budget. he concluded this. he said -- "every expert i've talked to says that these bills as they stand are -- the presiding officer: the senator's time has expired. mr. cornyn: so, mr. president, i would hope that my colleagues would pass the crapo motion to recommit this so the president can keep his commitment not to raise taxes on the american people. a senator: mr. president? the presiding officer: the senator from minnesota is recognized. ms. klobuchar: thank you, mr. president. i would like to speak in support of the amendment which would provide some much-needed relief to americans who are being brushed by ever higher prescription drug costs. i would first like to note i am eagerly awaiting the details of some of the proposals that were cut out there last night.
i appreciate the work of my colleagues, but i do want to hear the response from the congressional budget office, and as i have said on this floor many times, i am concerned about expanding medicare unless we do something about the geographic disparities that are already present in our system. you look at some of the numbers. the average patient got $6,600 in minnesota in 2006, and you look at the numbers in texas which is something like $9 300. what we want to try to do here with this bill and what i like about this bill is all of the cost reform measures that are going to push us toward rewarding states that are participating in systems that provide more efficient care, and if we don't do something about these geographic disparities, we are going to further exacerbate this by expanding medicare.
i have some concerns about this and i look forward to hearing from my colleagues as well as the solvency of the medicare program which is scheduled to go in the red by 2017 under existing circumstances. back to this amendment, the dorgan-snowe amendment, this amendment not only would allow american pharmacies and drug wholesalers to import f.d.a.-approved medications from canada and several other countries and pass the savings on to consumers, it would also import some much-needed competition into the american pharmaceutical market. it's estimated that the amendment which enjoys both democratic and republican sponsors would result in federal savings of $19.4 billion over ten years, just at a time when we are looking for these kinds of savings. millions of americans depend on prescription drugs to help them manage chronic disease or other illnesses, but drug prices continue to skyrocket. with annual increases well above the general inflation rate. from 1997-2007, retail drug
prices increased an average of 6.9% per year, more than two and a half times the generate of inflation, which was 2.6% per year over the same period. you look at that difference. 6.9% per year compared to 2.6% per year. as a result of these rising prices, many patients are forced to split pills, skip doses or not fill their prescriptions at all. yet right across the northern border of minnesota and canada, many of these same brand name prescription drugs are available at a much lower cost. for example, according to one recent comparison, a 90-day supply of lipitor costs $256 in the united states. in canada, it's available for for $188. in other words, canadians pay 26% less than americans for the very same drug. here's another example. a 90-day supply of nitroderm patches costs $303 in the u.s.
but $125 in canada. the canadian price is 59% cheaper. you can go right down the line of major brand name drugs and see these dramatic price disparities. in fact, every year canada's permanent pricing board compares canadian prices for patented drug products with prices in a number of other countries. consistently, prices in the u.s. are higher by double-digit percentages. in 2008, u.s. prices were on the average 63% higher than canadian prices. now, current federal law says that nobody except the manufacturer can import a drug into the united states. wholesale and retail pharmacies aren't allowed to. state and local governments aren't allowed to. individual americans aren't allowed to, even for personal use. but of course they do and they have been doing it for a number of years. now, my state, as i noted, happens to b